50.1K

Verified Solution

Link Copied!

Presented below are the 2021 income statement and comparative balance sheets for Santana Industries.

SANTANA INDUSTRIES Income Statement For the Year Ended December 31, 2021 ($ in thousands)
Sales revenue	$	17,850
Service revenue		7,000
Total revenue				$	24,850
Operating expenses:
Cost of goods sold		9,000
Selling expense		4,200
General and administrative expense		3,300
Total operating expenses					16,500
Operating income					8,350
Interest expense					330
Income before income taxes					8,020
Income tax expense					3,400
Net income				$	4,620

Balance Sheet Information ($ in thousands)	Dec. 31, 2021				Dec. 31, 2020
Assets:
Cash	$	10,100			$	3,820
Accounts receivable		6,100				4,000
Inventory		7,600				4,800
Prepaid rent		330				660
Equipment		18,100				15,600
Less: Accumulated depreciation		(6,900	)			(6,300	)
Total assets	$	35,330			$	22,580
Liabilities and Shareholders Equity:
Accounts payable	$	5,000			$	2,900
Interest payable		280				0
Deferred revenue		1,160				780
Income taxes payable		730				1,160
Notes payable (due 12/31/2023)		8,600				0
Common stock		11,800				11,800
Retained earnings		7,760				5,940
Total liabilities and shareholders' equity	$	35,330			$	22,580

Additional information for the 2021 fiscal year ($ in thousands):

1. Cash dividends of $2,800 were declared and paid.
2. Equipment costing $7,600 was purchased with cash.
3. Equipment with a book value of $2,300 (cost of $5,100 less accumulated depreciation of $2,800) was sold for $2,300.
4. Depreciation of $3,400 is included in operating expenses.

Required: Prepare Santana Industries' 2021 statement of cash flows, using the indirect method to present cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in thousands.)

Answer & Explanation Solved by verified expert

See Answer